The difference between the compound interest and the simple interest on a given principal is ₹1,725 in 2 years and the rate of interest in both cases is 25% per annum, and in the case when interest is compunded, it is compounded annually. Find the principal.
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Correct answer: D
Explanation
The correct answer is option 4 i.e. ₹27,600
The difference between SI and CI for two years on same amount with same rate of interest = {Principal × Rate2}/ 1002
We have, 1725 = {Principal × 252}/ 1002
⇒ {1725 × 10000}/625 = Principal
⇒ Principal = 2.76 × 10000 = 27600